Random Thoughts: Capitalism and Communism


The current big fight is between what for simplicity we can call “capitalism” and “communism.” Popular opinion would claim that communism lost. I believe that what we call capitalism may also fail, and for many of the same reasons.

We are not equal and we hate it

Despite all the happy talk, we are not all equal. Each of us has different talents and abilities; half us will be worse than average. Even when we have equal talents or abilities, circumstances can bring us very different outcomes. This can lead to resentment and hopelessness from those not gifted or lucky, and guilt and pride from those who were. The ungifted rage against the “unfair” rewards to the gifted, while the gifted feel both pride (better than you) and guilt at their gifts. Pride cause the gifted to believe their position is a sign of the inherent goodness. Guilt, perhaps, is more a feature of capitalistic societies. Guilt drives the successful to try to make amends, but self-interest means they want to do it in ways that do not harm themselves.

Rewards are not just unequal, they are very unequal

As I discussed before, whether it is wealth, power, number of fans, or blog hits, the rewards to success are not linear. The top one percent will garner vastly more than even the top ten percent. Instead of a world where the best garners slightly more than the second best, and they both garner a good bit more than the average, we have a world where the best garner huge rewards and the rest share relatively little. It does not matter what the rewards are (money, power, or sex); that skewed distribution causes problems. Under communism, it was political power; under capitalism, it is wealth; in many societies it is sex (harems). The “alpha” versus “beta” divide in the PUA world is an example of this division; the biggest players have vastly more partners than the average chump.
[I realize that all three are linked, in all societies, and that one tends to lead to the others. However, each society has a primary one. In capitalistic societies, it is earn wealth and use wealth to get power and babes. In communistic societies, it is garner power and use that power to sequester wealth and get the babes. In older societies it was get the babes (by war or careful marriages) to increase your power base, use that power base to garner wealth (perhaps by war).]

We will always end up with an elite, and they will never care about the rest.

Because of the vast differences in rewards, we will end up with an elite. That is, we will end up with a group that has vastly more resources (wealth, power, or babes) than the rest. The communists had party insiders; capitalism has corporate titans. Because they are the elite, and thus disconnected from everyone else, they will soon see the rest as “others” about whom the need not care. Indeed, they may see the “others” as a threat (or at least an inconvenience).

Resentment towards the elite

With vastly uneven rewards and an elite group that seems hostile towrds the rest, it does not take long for the rest to feel resentment towards the elite. Indeed in attempt to move things in their favor and protect their position the elites may actually break the order that brought them to their position. Eventually we have some kind of revolt that attempts to overthrow, or at least disrupt, the current system. We see this currently with the increasing hostility to, and distrust of government and corporate power.

What next? Who knows?

I do not know if the current system will collapse. If it does, I have no idea what might replace it; perhaps a more localist form of (somewhat) free markets with less global trade and fewer transnational corporations. Maybe, like the Soviet Union, we will limp along far beyond our expected end-date.

This is another Random Thought in the Random Thoughts series of quickfire posts (more like comments than articles).

5 Responses to “Random Thoughts: Capitalism and Communism”

  1. Richard Says:

    Like it says in the book “The Good Earth” by Pearl Buck.

    “when the rich become too rich, and the poor become too poor”.

  2. David Foster Says:

    You might enjoy (if that is the right word) Peter Drucker’s book The End of Economic Man. Written just before WWII, it is an attempt to understand the reasons for the rise of fascism, which Drucker explains in terms of:

    –the First World War, which “showed the individual suddenly as an isolated, helpless, powerless atom in a world of irrational monsters”

    –the worldwide depression, which “proved that irrational and incalculable forces also rule peacetime society: the threat of sudden permanant unemployment, of being thrown on the industrial scrap heap on one’s prime or even before one has started to work. Against these forces the individual finds himself as helpless, isolated, and atomatized as against the forces of machine war.”

    –the failure of Marxism as an economic system and belief system

    This was Drucker’s first book, and not as well written as his later work, but still worth reading for those interested in the kind of questions you’re addressing here. I posted some extended excerpts at the end of the discussion thread here.
    [DU: Thanks for the suggestion. I had not read the book, but will look it up.]

  3. Hope Says:

    Good post, and it’s a subject I think about quite frequently. You are right that communism has elites as well. I grew up in a “communist” society, and moved to a “capitalistic” one.

    There are no good solutions. Just have to live our own little average lives and hope we won’t get submerged by the crap that comes when the elites’ plays fail. Like bursting bubbles or widespread failures.

    It’s not worth selling one’s soul to maybe possibly get a chance at becoming part of the elite. There won’t be a popular “uprising” that won’t get co-opted by the elite. So being “happier,” however intangible, is the only way we little common peasants can get our piece. Luckily, money still doesn’t buy everything, like eternal life… yet.[DU: until the singularity :/]

    [DU: I agree on the co-opting. I am close to Daniel Gilbert’s view: we are about as happy as we want to be; situations have far less impact on our happiness than we suppose.]

  4. David Foster Says:

    Re elites…any society needs to have elites. The problem we have now is an attempted *consolidation* of elites: ie, an attempt to consolidate the multiple ladders of success that have existed in American society into a single ladder, with access tightly controlled via credentials.

  5. lawyerjourno Says:

    I really liked the post. In fact I have been thinking of writing the same things and almost have similar thoughts. May be in couple of days from now!
    [Thanks. I will look out for your post.]

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